'Even Spaceships Must Return to Earth': Morgan Stanley Warns Investors on Virgin Galactic Stock

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

'Even Spaceships Must Return to Earth': Morgan Stanley Warns Investors on Virgin Galactic Stock

Take your pick of metaphors – rocketing, earth shattering, stratospheric - Virgin Galactic stock has been surging this year, up more than 200%. The Mojave-based company now has a market capitalization of $7.2 billion even though it only generated $3 million in revenue last year.


Why all the excitement? No one seems to know, including Morgan Stanley, which issued a research note Thursday expressing bewilderment.

"We do struggle to identify significant thesis changing/accelerating events since the time of our initiation in early December of 2019," wrote analyst Adam Jonas in a note titled "Even Spaceships Must Return to Earth."

Jonas said he was surprised by the volume and volatility of the stock and he urged investors to be cautious. "A modest correction is overdue, and frankly, healthy," he wrote.

Investors did not seem phased by the warning, however, as the stock was nearly flat in Thursday's trading session after the note was published, though it dropped nearly 10% in after-hours trading. The stock closed Thursday at $37.26 on the New York Stock Exchange.

Virgin Galactic became the first publicly traded commercial space tourism company in October, going through a reverse merger.

The company's two competitors, Elon Musk's SpaceX and Jeff Bezos' Blue Origin, are privately held. Blue Origin, headquartered near Seattle is funded almost entirely by the Amazon CEO while Hawthorne-based SpaceX is VC and debt funded. The company, which is now valued at over $33 billion, got its latest financing from an $800 million Revolver facility from Bank of America in December.

Virgin Galactic will report earnings for only the second time as a public company on Feb. 25

https://twitter.com/thebenbergman
ben@dot.la

Subscribe to our newsletter to catch every headline.

Cadence

This Startup Wants to Make Testing for ADHD and Dyslexia as Common as Going to an Optician

Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

This Startup Wants to Make Testing for ADHD and Dyslexia as Common as Going to an Optician
Courtesy of Polygon

Here’s how Jack Rolo describes his childhood: He was good at chess, and bad at spelling. He was good at math, and bad at reading. Rolo went on to study physics at Durham University in his native England—and despite often struggling in his courses, it wasn’t until after he graduated that he was diagnosed with dyslexia, a common language processing disorder that affects reading.

Rolo’s experiences informed his founding of Polygon, a Santa Monica-based diagnostics startup that emerged from stealth on Friday with $4.2 million in funding, and the goal of better diagnosing dyslexia, ADHD and other learning-related disabilities. The funding includes a $3.6 million seed round led by Spark Capital, as well as $600,000 in pre-seed funding led by Pear VC.

Read more Show less

ZipRecruiter CEO Ian Siegel on How the Job Market Has Shifted

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Ian Siegel, ZipRecruiter
Image courtesy of ZipRecruiter

On this episode of Office Hours, host Spencer Rascoff talked with ZipRecruiter CEO and founder Ian Siegel about how he built his company, the lessons he's learned along the way and how he's seen the pandemic drastically reshape the job market—probably for good.

Read more Show less

Riot Games Doubles Down on Mobile With ‘Aim Lab’ Investment

Samson Amore

Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him

Riot Games Doubles Down on Mobile With ‘Aim Lab’ Investment
Image from Aim Lab

Riot Games has invested in virtual shooting range developer Statespace, accelerating the Los Angeles video game publisher’s efforts to dominate the mobile gaming space.

Read more Show less
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending